Polen Capital, an investment management firm, has released its “Polen Focus Growth Strategy” Q2 2024 investor letter. A copy of the letter can be downloaded here. In the second quarter, the fund returned -0.11% gross and -0.31% net, outperforming the Russell 1000 Growth Index’s 8.33% and the S&P 500 Index’s 4.28%. Generative AI (GenAI) continues to dominate the market in the second quarter. The portfolio does not include NVIDIA or other semiconductor companies that are currently benefiting from the demand for AI hardware. However, since the portfolio is broadly invested in software and IT services, the company expects GenAI’s long-term economic benefits to accrue to these industries. Additionally, to learn about the best picks for 2024, check out the fund’s top five holdings.
Polen Focus Growth Strategy covered stocks such as NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter. NVIDIA Corporation (NASDAQ:NVDA) provides graphics, computing and networking solutions. NVIDIA Corporation (NASDAQ:NVDA)’s one-month return was -7.41%, and the company’s shares were up 166.01% over the past 52 weeks. On July 18, 2024, NVIDIA Corporation (NASDAQ:NVDA)’s stock price closed at $121.09 per share, with a market capitalization of $2.979 trillion.
Polen Focus Growth Strategy said the following about NVIDIA Corporation (NASDAQ:NVDA) in its Q2 2024 investor letter:
“Generative AI (GenAI) continued to be a major talking point in the market in the second quarter. If that wasn’t immediately evident from the rapid growth of NVIDIA Corporation (NASDAQ:NVDA) into one of the largest companies in the world, one only needs to look to the semiconductor and technology hardware industries as a gauge of sentiment. Together, these two industries accounted for over 70% of the Russell 1000 Growth Index (the “Index”) and 85% of the S&P 500’s headline quarterly returns.
Our portfolio has no exposure to NVIDIA or other semiconductor companies currently benefiting from demand for fundamental AI hardware. The largest relative negatives for the quarter were NVIDIA, Apple and Salesforce.
NVIDIA was the biggest negative contributor to relative performance for the second consecutive quarter, with its stock price rising another 37% for a year-to-date return of +150%. At the time of writing, NVIDIA is the third largest company in the world, and for a brief period, it overtook Microsoft to become the largest company in the world. The company has once again delivered astonishing results that exceeded already high expectations, reinforcing the thesis that NVIDIA is the only clear “AI winner” due to the amount of revenue it is currently generating…” (Click here to read the full article)
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NVIDIA Corporation (NASDAQ:NVDA) ranks 5th on our list of the 31 most popular stocks among hedge funds. According to our database, 186 hedge fund portfolios held NVIDIA Corporation (NASDAQ:NVDA) at the end of the first quarter, up from 173 in the previous quarter. NVIDIA Corporation (NASDAQ:NVDA) posted revenues of $26 billion in the first quarter, up 262% year over year. While we see the potential of NVIDIA Corporation (NASDAQ:NVDA) as an investment, we believe AI stocks offer a better chance of delivering higher returns in the short term. If you are looking for AI stocks that are as promising as NVIDIA but trade at less than 5x, check out our report on the cheapest AI stocks.
In another article, we covered NVIDIA Corporation (NASDAQ:NVDA) and shared a list of AI stocks that analysts believe have greater upside potential. Nvidia Corp (NASDAQ:NVDA) is number 4 on the list. Additionally, you can find more investor letters from hedge funds and other leading investors on our Hedge Fund Investor Letters Q2 2024 page.
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Disclosures: None. This article was originally published on Insider Monkey.